The Federal Bureau of Investigation (FBI) recently reported that in 2022 Americans lost more than $10 billion in online fraud.
Criminals managed to siphon off $2.75 billion from the total amount of $10 billion through fraudulent schemes related to crypto.
Rise in Crypto Scams
There’s a direct relationship between the popularity of cryptocurrency and the number of crimes related to it, as one goes up so does the other.
Last year wasn’t a very good year for cryptocurrency since the overall trend of cryptocurrency prices was downward. Although the trend was downwards, yet criminals and scammers gained a lot through crypto scams.
They managed to pilfer around $2.6 billion from investors of bitcoin and other crypto tokens. On the contrary, the data for 2021 shows that in that year the loss from crypto scams was just $907 million.
According to the report issued by the FBI, there has been a significant rise in the sum of victims of crypto investment scams.
This has led to an unprecedented loss of funds for these traders and investors. As a result of these fraudulent activities, many victims have incurred substantial debts to make up for their losses.
The agency revealed that the victims of these crypto crimes are mostly individuals aged between 30 and 49 years old. Research has demonstrated that people of this age group are more involved in the cryptocurrency market.
On the contrary older investors have yet to adapt to the digital asset industry since it’s still a fairly new concept for them.
Methods Used To Scam
The FBI provided details on the prevalent methods used by crypto fraudsters to target victims.
These typically involve enticing people to link their crypto wallets to blockchains and liquidity mining applications that are in fact a sham.
Once the wallets are linked they rob the funds or hack into the social media accounts. Another common tactic used by scammers is impersonating some famous personality or celebrity.
The scammers often create videos promoting suspicious investment plans and use the face of a well-known person to lend credibility to their project.
However, the celebrities whose faces are used in these videos have not given their consent and are oblivious to the fact.
These celebrities don’t even know that their credentials are being used for fraudulent purposes. The victims who fall prey to these schemes end up losing their money and life investments.
There have also been instances where crypto scammers impersonate real estate professionals or act as agents of investment advisory companies.
They project themselves as financial advisors and consultants giving the best advice regarding investments in order to deceive.
However, rather than providing legitimate advice, their intention is to take as much money from their victims as they can.
How Can You Avoid Scams?
It is of utmost importance that investors remain vigilant and not invest in any scheme unless they’ve done a thorough background check.
A good start is to look for reviews and feedback regarding that particular scheme or website, or even news articles that could help.
Social media is also a great help since people do put up their unfortunate stories in order to prevent any further fraud.
Cold calls and unsolicited emails are also common scamming methods so one must be aware of these and avoid falling for them.
There are many reputable crypto exchanges and platforms so one must always use these for buying and selling crypto tokens.
Investors must avoid using new and unknown crypto exchange platforms to avoid falling prey to theft and fraud. There are many genuine platforms out there that even celebrities are advertising and endorsing.
It goes without saying, one must always keep their private keys and passwords safe and avoid sharing them with anyone.
At the end of the day, even with all these precautions, there are still chances of being scammed so trust your instinct. If a platform or a scheme looks too good to be true then trust your gut and avoid falling for it.